Selling Culmination is caused by the panicky unloading of stocks by the public and other weak holders which is matched against buying of experienced operators; the large interests of various stocks who either see an excellent opportunity to purchase at low prices the stocks they sold higher up, or wish to prevent further demoralization by giving the market support temporarily; and short covering by the bears who sense a turn.
Stocks thus become either temporarily or more lastingly lodged in strong hands. An abnormal increase in activity is one of the characteristic symptoms of a selling climax, since supply and demand must both expand sharply under these conditions, but the supply is now of poor, and the demand of good quality; and since the force of supply now will have been exhausted, a technical rally ensues.
Selling culmination had always been one of the best trade setup if you dare to buy when the news is bad and the public is all fear of the market. It is easy to determine selling culmination if you understand the psychology behind it. It takes a lot of courage to press the buy button because nothing looks good when it happened and it is almost like doom's day where you will observed a lot of people in depression mode and they will tell you that they lost a huge amount of money in the market. Moreover from the corporate side, you will hear news like companies bankrupted, collapsed, declining profits etc..The best way to buy at really low prices is refrained yourself from listening to the news because it will psychology frightened you and emotionally defeat your daring guts. I told you, the stock market is not designed to allow you to make money.
Ronald K
